Legislature passes first versions of budget bills

JACKSON — Mississippi legislators are starting to pass the first versions of budget bills for the year that begins July 1, but much of what they’re approving now is likely to change during the next several weeks.

The House and Senate face a late-April deadline to allocate money for everything from schools to prisons.

Top lawmakers say the state will spend roughly $5.6 billion in state money in fiscal 2013, with much more coming from federal sources.

House Appropriations Committee Chairman Herb Frierson, R-Poplarville, said yesterday the House proposes putting about the same amount of money next year as in the current year into several big-ticket programs, including elementary and secondary education, community colleges, universities and Medicaid.

“I wouldn’t want to send it to the governor, but I’m satisfied at this point in the process,” Frierson said of the proposed House budget. “It’s still a work in progress.”

The House yesterday passed dozens of bills for special fund agencies, which mainly get their money through licensing fees, user fees and special taxes. Today, the House is expected to consider a long list of bills for general fund agencies, which receive their money through general tax collections.

The Senate is expected to move forward today with its own set of budget bills, and Senate leaders revealed few advance details about their plan.

For now, the House is planning to balance the budget by pulling $48 million from cash reserves of special-fund agencies such as the Insurance Department, the Coast Coliseum, the Board of Nursing and the Board of Cosmetology. Frierson called the reserves “idle cash,” but some lawmakers say they’re hearing complaints agencies that say they have long-term plans for their reserves.

“How are we going to explain to the cosmetologists that ‘we took some of your money’?” asked Rep. Charles Young Jr., D-Meridian.

“I would just tell them the truth,” replied Rep. Mac Huddleston, R-Pontotoc, the appropriations vice chairman.

For the past several years, lawmakers have balanced the budget by pulling money out of several state reserve accounts, including a health care trust fund that was established in the late 1990s with winnings from a massive state lawsuit against tobacco companies.

Among the agencies that could lose cash reserves is the Department of Finance and Administration, which manages state-owned buildings and collects rent from agencies that occupy many of the structures.

DFA’s executive director, Kevin Upchurch said he has “some concerns” about the withdrawal of special funds from his department. He said the money would come from surplus property, rent and record management system funds. He said withdrawals from the rent fund are a particular problem because the department needs to keep enough money in that account to cover three months’ worth of expenses at the state Capitol complex.

Frierson said the use of special-fund cash reserves might decline in the final budget. He also said the $48 million is the amount needed in the coming year to cover a shortfall for the Public Employees Retirement System. PERS officials say the system needs an additional $48 million during fiscal 2013 and $26 million during fiscal 2014.

A commission appointed by Republican former Gov. Haley Barbour studied the PERS system last year and recommended a three-year freeze on the cost-of-living adjustment retirees receive. The commission also recommended a long-term change in the pension rules for new hires of state and local government, by adding a defined-contribution component

Many current lawmakers were elected in November on promises that they’d fight any major changes to PERS, and no changes have come up for serious consideration this session.

Frierson said the state needs to put more public money into PERS the next two years “because we refuse to take our head out of the sand and recognize that we have a problem.”

Senate Appropriations Committee Chairman Buck Clarke, R-Hollandale, would not say yesterday whether the Senate budget includes more money for PERS.

“We recognize that issue out there, and we have it on our radar,” Clarke said.

The proposed House budget includes $2.5 million that the state Department of Health requested for AIDS treatment. Officials said without the money, Mississippi would lose $5 million in federal funding for AIDS patients.

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